Solving Cities

Large cities power U.S. economy

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A new report finds that urban America generates nearly 85 percent of U.S. GDP.

In the United States, large cities play an impressive role in the U.S. economy, especially compared to other countries.

That's the major finding in a new report from McKinsey & Company that looks closely at U.S. cities in the larger global economic context. The report found that U.S. cities with 150,000 people or more -- defined here as "large cities" -- generated nearly 85 percent of the country's GDP in 2010. That compares with China whose large cities generate 78 percent of national GDP, and Western Europe (65 percent). The graph below breaks it down even further:

In the coming years expect U.S. cities to see even bigger growth in the global economy. By 2025, McKinsey predicts, the 259 largest U.S. cities are expected to account for more than 10 percent of global GDP growth.

The report highlights more impressive statistics:

  • Of the 600 cities that MGI expects will account for 60 percent of global GDP growth by 2025, nearly 1 in 7 is in the United States.
  • Today, the metropolitan areas of New York and Los Angeles are the world’s second and sixth largest, respectively, by GDP.
  • A considerable swath of middleweight cities enjoy relatively high incomes that help explain the great overall importance of cities in the US economy. The country has just over 255 middleweight cities, and the top 28 cities, after New York and Los Angeles, contribute more than 35 percent of US GDP.

Considering that about 81 percent of Americans live in metropolitan areas, these numbers aren't all that surprising. However, as policy makers decide how to invest in the future, it would only make sense that these numbers should be taken into account considering cities are the roaring engine of the U.S. economy.

Download the full report here.

Photo: laverrue/Flickr

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Tyler Falk

Contributing Editor

Tyler Falk freelance journalist based in Washington, D.C. Previously, he was with Smart Growth America and Grist. He holds a degree from Goshen College. Follow him on Twitter. Disclosure